UK stocks rose early on Thursday led by shares of Micro Focus (LON:MCRO) which surged on merger news whilst mining companies gained on signs of stronger export growth in China.
Micro Focus gained over 20% on news it will merge with some of the spun-off software assets of Hewlett Packard Enterprise (NYSE:HPE) in a deal worth $8.8bn. No sooner has the UK lost a technology giant with ARM (LON:ARM) selling out to Softbank (T:9984), than it has gained a new one. Although the assets are not all new to the UK since they were formerly owned by Autonomy before being taken over by HP.
Every sector of the FTSE 100 is higher on the Micro Focus deal because it’s a good sign for the continued growth of UK business and technology post-Brexit. British firms still have the confidence to buy overseas assets despite the drop in sterling.
Chinese exports fell just -2.8% y/y with imports gaining 1.5% y/y. The data is not wildly positive but just a sign that China’s economy is a bit more ‘steady as it goes. The lack of volatility in China’s economic performance is welcome. Import growth is a good sign for miners like Anglo American (LON:AAL), a top riser on the FTSE, which is heavily dependent on Chinese demand for commodities.
A big upward surprise in RICs house price data has supported homebuilding shares which dipped after results from Barratt (LON:BDEV) in the previous session. Dixons Carphone (LON:DC) shares rose over 3% after well-received results, which dampened fears of an immediate negative Brexit effect on the retailer’s profits.
US stocks look set to edge out a slightly higher open on Thursday, with the final opening levels likely to be impacted by any change to investor confidence following this afternoon’s ECB monetary policy announcement.
USA pre-opening levels
S&P 500: 2 points higher at 2,188
Dow Jones: 12 points higher at 18,538
NASDAQ 100: 2 points higher at 4,833
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